Teamwork Efficiency and Company Size

Galashin Mikhail () and Sergey Popov
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Galashin Mikhail: Department of Political Science, University of California Los Angeles, Los Angeles, CA, USA

The B.E. Journal of Theoretical Economics, 2016, vol. 16, issue 1, 337-366

Abstract: We study how ownership structure and management objectives interact in determining the company size without assuming information constraints or any explicit costs of management. In symmetric agent economies, the optimal company size balances the returns to scale of the production function and the returns to collaboration efficiency. For a general class of payoff functions, we characterize the optimal company size, and we compare the optimal company size across different managerial objectives. We demonstrate the restrictiveness of common assumptions on effort aggregation (e.g., constant elasticity of effort substitution), and we show that common intuition (e.g., that corporate companies are more efficient and therefore will be larger than equal-share partnerships) might not hold in general.

Keywords: team; partnership; effort complementarities; firm size (search for similar items in EconPapers)
JEL-codes: D02 D2 J5 L11 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Teamwork Efficiency and Company Size (2014)
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DOI: 10.1515/bejte-2014-0040

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